Compare Development Exit Finance
For near-complete projects, development exit finance can save your profits, unlock capital and minimise pressure
Secure Development Exit Finance Quickly Using Brickflow
Brickflow is the quickest way to secure the best development exit finance for your project. It takes just three simple steps:
- SEARCH & COMPARE loans from 50+ development exit bridging lenders instantly
- RECEIVE a same-day DIP (our record is 7 minutes!)
- APPLY directly from the platform with your advisor or a Brickflow partner
Using our live market search, it takes less than 30 seconds to enter the details of your development and compare real-time borrowing from the breadth of the market. When you’ve found your loan, you can have a DIP (or multiple DIPs) back within the hour. It doesn’t get quicker than that.
On top of our ultra-fast search process, securing development exit finance through Brickflow enables you to:
- Instantly access the bridging market and compare current lender rates, fees, maximum LTVs and more
- Borrow between £25,000 and £100 million
- Find out exactly how much you can borrow, how much capital you can release and at what cost
- Instantly filter out lenders who don’t match your criteria
- Access our lender-favoured digital application form, meaning quicker credit decisions and quicker completion times
Compare loans from 50+ development exit lenders
See how much you could borrow against a specific project & at what rate
Check detailed eligibility criteria to avoid wasting time & money
Ensure your deal stacks & make smarter investment decisions
What Is Development Exit Finance and How Does It Work?
Development exit finance is a type of bridging loan that allows developers to repay their existing debt ahead of sales proceeds and potentially release equity from a project that has reached Practical Completion (PC).
Whether your project has overrun or sales have been slow, lenders can be pushy when the development finance term ends. Development exit bridging loans give you time and flexibility to consider alternative exit strategies so you can sell or refinance under less pressure. This can help you avoid expensive default costs or a ‘fire sale’ scenario.
Development exit finance can also help you move on to another project sooner by releasing your built-up capital to invest elsewhere.
| Key features of Development Exit Loans | |
| LTV | Up to 75% (gross) of the open market GDV (Gross Development Value) less costs of remaining wor |
| Rates | 7 – 15% (Q2 2024)* |
| Loan term | 1 – 24 months |
| Loan size | £25,000 - £100 million |
| Availability | Available for UK developments that have reached PC |
| Arrangement | 3 days - 4 weeks (with c. 14 days being most common) |
| No early repayment penalties | After an agreed term, typically 1-6 months |
*The interest rate you pay is determined by various factors, including the LTV of the property, current market conditions, property type and remaining works, your exit strategy, and your own strength as a borrower, net asset value, and credit file.
What Is Development Exit Finance Used For?
There are generally three scenarios where development exit finance would be used:
- Where a development hasn’t been completed on time
- Where some or none of the units have sold before the original loan term ends
- To raise capital to move on to another project
Development not complete
It’s pretty common for property development projects of any scale to run over the planned timescale for completing the work, with so many factors that can cause delays.
If you’ve reached a point in the construction where all units are wind and watertight, your property or properties are far lower risk for lenders, so you can secure better rates with a development exit loan.
This gives you the breathing space and affordability to complete the project to your desired standard so you can achieve the full value.
Properties have yet to sell
Even if the project is completed on time, securing a sale for the unit(s) may take longer than expected, whether due to a slow market or other buyer issues.
Development finance loans have a pre-agreed sales period after the expected completion date to give the developer time to sell. However, if the loan has to be extended, development finance lenders might be reluctant, possibly only extending for a few months and will typically charge extension fees. Alternatively, a development exit loan might carry a similar fee to the existing lenders extension fee but will offer a comparable or cheaper rate and a longer loan term.
Additionally, development finance lenders can get pretty demanding when they want to be repaid, pressuring you to lower the price of your properties to secure faster sales. Development exit finance can turn down the pressure cooker and give you time to sell at the price you want to achieve or refinance on a longer-term solution.
Moving on to the next project
Development exit loans are not just for scenarios where your project overruns or doesn’t sell quickly. You might have found the next opportunity and don’t want to miss out because your money is tied up in a near-complete development. By releasing the capital from your project, you can move on to the next one sooner.
An example scenario
To understand how development exit finance can be beneficial, let’s look at an example scenario:
| The Scenario | The Solution | The Outcome |
| A development finance loan due to expire on an 11-unit completed, but unsold development | Refinance all units with development exit, releasing cash to furnish some units for short-term lets | Development exit bridging loan secured at a lower rate than the current debt, and no early exit penalty after month 3. The developer has income from the let units and can sell the remaining units with less pressure. |
Benefits of Development Exit Loans
- Achieve a better GDV: Sell or refinance under less pressure.
- Flexibility: Repay the loan at any point in the term, usually without penalty after 3 months.
- Speed: Development exit loans can be arranged in as little as a couple of weeks
- Leverage: Release up to 75% gross of the open market value.
- Rental income: Most development exit loans will allow the property to be let out on short-term or 12-month ASTs (development finance loans don't always allow this).
- Improve business cash flow: Until the development finance facility is fully repaid, the developer will not see sales proceeds. Development exit finance can help developers release equity ahead of time.
- Move on to the next project sooner: By leveraging the value in the development, you can release capital to invest elsewhere without having to wait for the sales proceeds.
The Importance of Comparing Development Exit Finance In Today's Market
By the time you reach practical completion on your development project, you’ve already spent plenty of blood, sweat and tears. At just a stone’s (or brick’s) throw from the finish line, the last thing you want to do is diminish your hard-earned profit by not giving proper due diligence to searching for the best development exit deal.
Property development exit finance is a type of bridging loan, so there are many lenders in the market, from banks and challenger banks to pension funds and specialist lenders. Searching the breadth of the market is the only way to ensure you get the best deal for your development exit finance – the more lenders you approach, the more you will understand the variation in what you can borrow and at what costs.
Bridging lenders will all have differing figures, costs and criteria for their loans, depending on:
- What condition your property/ properties are currently in, and whether or not you have practical completion sign-off
- The remaining works
- Their current interest rates
- Arrangement and exit fees
- Minimum and maximum loan terms
- The valuer the lender uses
These costs can vary by tens to hundreds of thousands of pounds and the equity available to you can vary by the same with every lender.
With Brickflow’s live loan search, you can compare development exit finance from 40+ lenders to find the best deal on the market.
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As well as any paperwork to meet the above criteria, you’ll also have to provide the development exit lender information about your development, including:
- The development schedule detailing all units and corresponding planning permission
- A schedule of any work still to be completed
- Details on your current development finance loan
- Any other shareholders or investors, including mezzanine finance or other second-charge loans
- Your marketing strategy for the property/ properties
- New build warranties
How Much Can I Borrow & How Long Will It Take To Secure Development Exit Finance?
When you secure your developer exit finance through Brickflow, you will be able to borrow between £25,000 and £100 million, although a lender is more likely to engage for loans of £150,000 or more.
Developer exit finance can be completed in just a few days but will generally take between 1 and 4 weeks.
If you know your development project won’t be completed or sold before your finance term ends, starting the process of applying for a development exit loan early will ensure the funds are in place to repay the debt and avoid servicing a more expensive loan.
How much you can borrow depends on some key metrics:
- The GDV of your project less costs of any remaining works and a portion of the profit
- The lender you use
- Your exit strategy
- You as a borrower (see eligibility criteria above)
Using an example loan on a development with a GDV of £2.2m, you would be able to borrow a net loan of £1,383,830 at a cost of £266,17.
Associated Interest Rates, Costs and Fees
- Interest: Normally calculated on a daily basis, so you only pay interest for as long as you have the loan. Some lenders will still charge on a monthly basis, so you could be charged additional interest. Ask your lender and/or advisor to confirm this.
- Arrangement fees: Up to 2% of the gross or net loan
- Exit fees: Exit fees are not very common in development exit finance, but they do exist. Almost none of the bridging lenders on Brickflow charge exit fees, however, there are minimum interest charging periods - e.g. 1 month / 3 months / 6 months; i.e. regardless of when you redeem, the lender has to receive at least the interest equivalent to the minimum term
- Early repayment penalties: Most lenders don’t charge this on a developer exit loan after the first three months of the loan term. If you know you will be in a position to repay sooner than three months, your advisor will know the most appropriate lender to use
- Legal fees: Your own, as well as the lender’s
- Broker fees: Typically paid by the lender
- Valuation or survey fees: Lenders should provide quotes from a few firms and let you decide your preferred option
Planning Your Exit: Strategies and Tips
Your property development might have gone pretty smoothly, completed on time and on budget, with sales wrapped up before the end of the loan term – which is definitely an achievement to be proud of.
More commonly though, it won’t have and understanding the options available to you to exit your development finance loan and preserve your profits is crucial.
If you're nearing both the end of your development finance loan and project completion, with the bulk of the construction work completed, now is the time to start searching for a development exit loan.
Repaying your development finance with a development exit bridge loan can help you achieve your desired GDV or jump-start your next project.
Here are some tips to help you plan your exit:
- Search for a development exit loan on Brickflow: Until you know what actual borrowing options are available to you, you can’t plan anything. A search takes less than 30 seconds and can save you hundreds of thousands of pounds
- Speak to a specialist bridging advisor: They have the expertise and inside knowledge to find the right solution for your circumstances and can go over your Brickflow search results, secure a DIP and apply for your loan on the same day
- Don’t panic: When a lender starts dialing up the pressure to be repaid, it’s easy to understand why developers make rash and panicked decisions for the property they’ve worked tirelessly on for years – but don’t. Development exit finance is a fast, flexible and affordable solution
- Reassess your original exit strategy: Is the sales market different now than when you began your development? Is it more viable to refinance and keep some or all of the units for rental? Using development exit finance gives you the time to properly assess all your options
Refinancing Options After Using a Development Exit Loans
With development exit loan terms ranging from 1 – 24 months, most developers can complete their project and sell, if that is their plan, within the time frame and repay the loan.
For those refinancing after the property development exit finance, they will typically move onto either a:
- Commercial mortgage: If the development is a commercial property or properties, such as care and retirement homes, retail centres, gyms, hotels etc., and the developer plans to retain and let the buildings. Also applicable to mixed-use (part residential and part commercial) developments.
- Buy to let: Where the development was entirely residential (houses or flats, social housing, affordable homes) and the developers plans to retain part or all of the units to let.
You can read more about the pros and cons of bridging finance to better understand the risks involved with any bridging loan, including development exit finance.
Applying for Development Exit Finance Using Brickflow
The easiest and quickest way to apply for development exit finance is by using Brickflow.
- SEARCH & COMPARE live loans from 50+ bridging lenders, instantly
- RECEIVE a same-day DIP from multiple lenders (our record is 7 minutes)
- APPLY for a loan using our lender-favoured online application
Here’s how it works:
- Enter your project details – It takes seconds to run your numbers through Brickflow’s bridging loan calculator
- Instantly search the breadth of the market – With over 50 bridging lenders on the Brickflow platform, from banks and non-banks to specialist lenders or pension funds, you’ll find the best deal available
- Compare and shortlist your preferred loans – Your search results will show you live loan options with details on LTVs, interest rates, fees and more
- Submit to multiple lenders directly from the platform – We'll connect you with an intermediary through the platform and they will help you to submit your loan application to multiple lenders using our digital application form, cutting out any repetitive form-filling
- Receive your same-day DIPs (Decision in Principle) – Our record for receiving a DIP back is 7 minutes, and you can receive multiple same-day DIPs to compare
- Apply online – After looking over your DIPs, apply to your preferred lender. Your advisor will manage your application and ensure you’re happy with the loan terms. Lenders love applications from the Brickflow platform because we cover everything they need to know to make quick credit decisions. Missing or incorrect information can easily (and very often does) delay securing your bridging loan
What does exit finance mean?
An exit strategy refers to the way in which a loan is repaid, either by a property sale or by refinancing onto a longer-term mortgage or bridging loan.
Development exit finance is a short-term loan specifically used to "exit" from a previous property development loan. It essentially bridges the gap between completing your property development and selling or refinancing the units, allowing you more time to secure a sale and potentially achieve a better sale price.
Can you secure development exit finance as a first-time developer?
Yes, it is possible, though there may be less options available to you. Lenders typically prefer borrowers with a proven track record in successfully completing property developments as it reduces their perceived risk.
However, since development exit is a bridging loan, the lender's primary focus is on the exit strategy. If you have successfully achieved practical completion on your development as a first-time developer but need a little more time to sell, you have already lowered the level of risk in the project. With a good marketing strategy in place, selling prices that accurately reflect the current market, and demonstrating that you have a clear understanding of the loan terms, securing a development exit loan should be possible.
How quickly can development exit finance be arranged?
At Brickflow, you can find the best development exit loan on the market within seconds and receive a Decision in Principle within 7 minutes of applying. From this point, the loan can take anywhere from 1 to 4 weeks to complete.
Does it matter if the project is completed or not before securing development exit finance?
Yes, development exit finance is intended for near-completed projects with minimal remaining work (often less than 10% of the total build costs). You can typically apply for a development exit loan when your property/properties are watertight and windproof.
How much you can borrow will be limited by the costs of the remaining works. Lenders can offer funding before practical completion sign-off, but if you have reached PC then you will have more lenders available and you can likely secure better rates.
Can I repay the loan early?
Yes, exit penalties are not usually included in development exit finance after a certain period (typically 3 months). Since interest is charged daily, the sooner you pay off the loan, the more you will save in interest payments.
How much can I borrow?
When you secure your developer exit loan through Brickflow, you can potentially borrow between £25,000 and £100 million, although most lenders are more likely to engage for loans of £150,000 or more.
The loan you secure will be limited to the lender's maximum LTV ratios, the market value of the development, your exit strategy and your strength as a borrower.